United States v. Howard

• Decision Date: 17 April 2018
• Docket Number: No. 17-6125,17-6125
• Citation: 887 F.3d 1072
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Ryan Jacob HOWARD, Defendant–Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

887 F.3d 1072

UNITED STATES of America, Plaintiff–Appellee,

v.Ryan Jacob HOWARD, Defendant–Appellant.

No. 17-6125

United States Court of Appeals, Tenth Circuit.

April 17, 2018

Submitted on the briefs:^* William P. Earley, Assistant Federal Public Defender, Oklahoma City, Oklahoma, for Defendant–Appellant.

Mark A. Yancey, Acting United States Attorney, Amanda Maxfield Green, Assistant United States Attorney, Oklahoma City, Oklahoma, for Plaintiff–Appellee.

Before TYMKOVICH, Chief Judge, MURPHY, and McHUGH, Circuit Judges.

McHUGH, Circuit Judge.

Defendant Ryan Jacob Howard entered a guilty plea on three counts of transportation of stolen property in violation of 18 U.S.C. § 2314. During sentencing, Mr. Howard objected to the recommended restitution award for the second count, ordered under 18 U.S.C. § 3663A. This appeal concerns whether the court correctly used the replacement cost as the restitution value and correctly determined the value of the returned property to be zero. We hold that it did and affirm the district court.

I. BACKGROUND

A. Factual History

Between August 2015 and May 2016, Mr. Howard stole various pieces of laboratory equipment from Oklahoma State University ("OSU") and transported them to his apartment in Texas. The equipment included thermocyclers, pipettors, chromatography

machines, and centrifuges. While attempting to steal another chromatography machine on May 19, 2016, Mr. Howard was arrested and police officers executed a search warrant on his vehicle, recovering a set of bolt cutters and various pieces of laboratory equipment. Later, on June 8, 2016, investigators executed a search warrant on Mr. Howard's residence in Texas. The investigators discovered many of the items Mr. Howard had stolen from OSU as well as equipment stolen from Northeastern Oklahoma State University. Investigators recovered most of the stolen items and returned them to the respective universities.

Some of the equipment, however, either was not returned or was in damaged condition when recovered. In particular, Mr. Howard stole a Fast Protein Liquid Chromatography

machine ("FPLC machine") from the OSU Chemistry Department, which was damaged. Mr. Howard stole the FPLC machine between March 18, 2016 and March 23, 2016, and returned it sometime after June 8, 2016. Mr. Howard does not dispute that he stole the FPLC machine, but he does challenge the value of the FPLC machine and its condition when it was returned.

B. Procedural History

On July 20, 2016, Mr. Howard was indicted on three counts of transportation of stolen property in violation of 18 U.S.C. § 2314. He pleaded guilty to each of the three counts. The PSR for Mr. Howard recommended a term of imprisonment between twelve to eighteen months, supervised release after prison, and restitution of $25,212.50—$24,020 for the FPLC machine and $1192.50 for the pipettors.

Mr. Howard objected to the amount of restitution recommended in the PSR for the FPLC machine. Specifically, Mr. Howard contended that the FPLC machine was not damaged beyond repair and that the cost of a replacement machine was not the proper measure of restitution. During sentencing, Mr. Howard again objected to the restitution amount, challenging both the use of the replacement cost and the failure to assign any value to the parts returned to OSU.

At the time of sentencing, OSU was not able to produce any documentation related to the date of purchase or the value of the FPLC machine at that time. OSU no longer has any invoices related to the purchase of the FPLC machine or its related equipment. As a result, the only indication of the value of the stolen FPLC machine in the record is the statement in the Presentence Investigation Report ("PSR") that "[i]nvestigative reports reflect the value of the stolen machine was $40,000." PSR at 4.

The government did advance uncontested evidence that researchers at OSU purchased the replacement for the FPLC machine for $24,020. It also offered evidence that the replacement machine is "not as advanced as the original equipment."Id. at 19.

The government additionally provided evidence from OSU that, when the FPLC machine was returned, it was damaged with "[p]arts of the machine ... either broken or missing." Id. at 6. In its Declaration of Victim Loss, OSU claimed "the machine was damaged beyond repair," id. at 4 n.3, and "indicated the machine could not be repaired and was unusable for research purposes," id. at 18. In addition, a member of the OSU Police Department noted that "all the wires and hoses were cut and pieces were missing." Id.

Mr. Howard disagreed, claiming the machine was not "damaged beyond repair," id. at 18–19, and further asserting that, as returned to OSU, it has value for which he should have received credit. In support, Mr. Howard compared photographs of the equipment seized from his apartment to parts available from laboratory equipment sales websites and online auction websites. He claimed the prices of those advertised parts were reflective of the reasonable value of the returned FPLC machine. Based on his research, Mr. Howard asserted that the FPLC machine, when it was returned to OSU, was worth $5540. Thus, he argued his restitution obligation related to the FPLC machine should be reduced by that amount.

The district court rejected Mr. Howard's argument for a reduction in the restitution award, noting that the evidence presented by Mr. Howard concerned "refurbished" parts. Yet Mr. Howard presented no evidence concerning whether the parts "could be refurbished, how much time and effort it would take to refurbish them, how much the advertising or eBay costs would be, [or] how much employee time would be necessary" to sell the parts. App. III at 12. The district court therefore overruled Mr. Howard's objections to the restitution award. The court determined that the value of the stolen FPLC machine when returned to OSU was zero and set restitution for the FPLC machine at $24,020, the amount recommended in the PSR, which is the amount OSU paid for the replacement machine.

The district court entered judgment and Mr. Howard filed a timely appeal.

II. DISCUSSION

Under the Mandatory Victims Restitution Act ("MVRA"), courts "shall order ... that the defendant make restitution to the victim" of "an offense against property under this title." 18 U.S.C. §§ 3663A(a)(1), (c)(1)(A)(ii). Ordinarily, the return of the stolen property is the proper form of restitution but:

(B) if return of the property ... is impossible, impracticable, or inadequate, [the defendant shall] pay an amount equal to—

(i) the greater of—

(I) the value of the property on the date of the damage, loss, or destruction; or

(II) the value of the property on the date of sentencing, less

(ii) the value (as of the date the property is returned) of any part of the property that is returned.

Id. § 3663A(b)(1). The "burden of demonstrating the amount of the loss sustained by a victim as a result of the offense shall be on the attorney for the Government." Id. § 3664(e). "Restitution is not intended to punish defendants or to provide a windfall for crime victims, but rather to ensure that victims, to the greatest extent possible, are made whole for their losses." United States v. Parker , 553 F.3d 1309, 1323 (10th Cir. 2009). Furthermore, "the ordinary meaning of ‘restitution’ is restoring someone to a position he occupied before a particular event." Hughey v. United States , 495 U.S. 411, 416, 110 S.Ct. 1979, 109 L.Ed.2d 408 (1990).

The term "value" in the MVRA is not defined. As such, courts have determined that a variety of different measures may be appropriate in determining "the value of the property." For example, the Second Circuit has suggested that "fair market value will generally provide the best measure to ensure restitution in the ‘full amount’ of the victim's loss." United States v. Boccagna , 450 F.3d 107, 109 (2d Cir. 2006). The court acknowledged, however, that "[i]n some circumstances, ... other measures of value may better serve the MVRA's compensatory purpose." Id. We have cited Boccagna with approval and noted that its "approach allows the district court to determine in each circumstance the best measure of value for the purpose of calculating the actual loss in awarding restitution." United States v. James , 564 F.3d 1237, 1246 (10th Cir. 2009). We added the caveat that even the flexible approach suggested by the Second Circuit must fulfill the purpose of restitution and must not "punish defendants or ... provide a windfall for crime victims, but rather ... ensure that victims, to the greatest extent possible, are made whole for their losses." Parker , 553 F.3d at 1323.

In determining the amount of loss, "a sentencing court may resolve restitution uncertainties with a view towards achieving fairness to the victim, so long as it still makes a reasonable determination of appropriate restitution rooted in a calculation of actual loss ." James , 564 F.3d at 1246 (quotation marks omitted). Thus, in addition to fair market value, courts have approved the use of replacement cost, see Boccagna , 450 F.3d at 109, foreclosure price, see James , 564 F.3d 1237, and cost to the victim, see United States v. Wilfong , 551 F.3d 1182, 1184 (10th Cir. 2008). Furthermore, we have noted that in some cases, "repair or restoration costs may be most appropriate." Wilfong , 551 F.3d at 1184 n.2. Thus, depending on the particular factual circumstances of each case, different measures of value may be appropriate and, perhaps, there may be multiple measures of value, each one of which may be appropriate.

Regardless of the valuation method chosen, "the controlling metric for an award of restitution pursuant to the MVRA in every case is actual loss suffered; nothing more, nothing less." United States v. Ferdman , 779 F.3d 1129, 1139 (10th Cir. 2015).

A. Standard of Review

"We review the legality of a restitution order de novo , which involves reviewing the underlying factual findings for clear error and the amount of...